Sharia compliant interest free loans launched in Australia
Jun 29 2011
Sydney based Islamic organization MuslimVillage Incorporated, has introduced interest free loans to assist low income earners purchase essential items, regardless of their race or religion. The initiative, in partnership with a Christian charity and supported by a major bank and the Australian government, is also fully Sharia compliant and a good example of how Sharia can work within a secular legal system to benefit society.
MuslimVillage Incorporated, the publishers of Muslimvillage.com, launched the Qard Hassan No Interest Loan Scheme (NILS) NSW in late May. The scheme is a sustainable financial solution that reflects the Islamic teachings of ethical trading, no interest and the ethos of helping others without expecting anything in return.
Qard Hassan, which means “benevolent or good” loan in Arabic, is the result of a 18 month establishment process that has resulted in a partnership agreement with Good Shepherd Youth and Family Services to offer the scheme. Good Shepherd supervises and provide guidance to over 300 similar NILS programs established through out Australia.
The Qard Hassan NILS NSW program is one of the first to be run by a Muslim organisation. Two other Qard Hassan programs run by Islamic organisations have also been recently established in Victoria (Islamic Council of Victoria) and South Australia (Islamic Foundation Australia).
With $90,000 seed funding from the National Australia Bank and an establishment grant from the Australian Federal Government’s Department of Families, Housing, Community Services and Indigenous Affairs, Qard Hassan NILS intends to assist all low income earners, regardless of race or religion.
The sharia-compliant micro-finance product Qard Hassan NSW NILS provides applicants, with loans of up to $1,200 that can be used to purchase goods and service that are considered essential for day to day living.
The list of eligible items is extensive and includes items such as household appliances – fridges, washing machines, stoves; furniture, computers, education costs, car purchase or repairs and health items such as wheelchairs, hearing aids and dental costs.
Hani Eljamal, the Manager of the Qard Hassan NILS NSW scheme explained how the program assists low income earners purchase items that many others may take for granted.
“For many people on low incomes, replacing a broken down fridge or washing machine is near impossible if one is living week to week and unable to save or access finance. Qard HAssan NILS enables applicants to acquire assets that they would otherwise be unable to afford” he said.
“The defining quality of NILS schemes is that they are a form of helping people in a dignified manner. They are really giving someone a hand up, rather than a hand out” said Eljamel.
Another important aspect of the scheme was that money was not given to the successful applicants of the program but rather paid directly to the supplier of a good or service. This guaranteed that the scheme operated to help those genuinely in need.
Eljamel further explained how the scheme was a good example of people working together for mutual benefit.
” All loans are expected to be paid over a 12-18 month period with repayments automatically deducted from the loan recipients Centerlink payments. These payments then come back to us to loan out to others in need, allowing the scheme to potentially assist hundreds of people over the coming years” he explained.
Eljamel was especially proud of the fact that the first loan approved was for a non Muslim student to purchase a laptop to assist with his studies.
Full details such as eligibility criteria and how to apply for Qard Hassan NILS can be found at their website http://qardhassan.org/ or contacting 1300 964 292 (Australian residents only).
Video of Qard Hassan NILS NSW launch
(Apologies for low sound quality)